Last Update – December 8, 2014
“All men dream, but not equally. Those who dream by night in the dusty recesses of their minds, wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act on their dreams with open eyes, to make them possible.” – T.E. Lawrence
One thing you will find most common amongst the entrepreneurial minded is a state of mind. Many business owners will attest to the fact that many of times they had opportunities to quit. However, course-correcting and adjusting to what outsiders deem impossible is what will keep you ahead of the curve. Say you have an idea to start your own business and you don’t know where to begin. Sit down and start to answer the following questions — there are no right or wrong answers.
- What problem does my product or service solve?
- Who will buy my product or service?
- Why will they buy it?
- Where will they buy it—specialty shops, department stores, mail order, online?
- What do I need to charge to make a healthy profit and will people actually pay that?
- What products or services will mine be competing with?
- Is my idea practical and will it fill a need?
- What is my competition?
- What is my business advantage over existing firms?
- Can I deliver a better quality service?
- Can I create a demand for my business?
- What business am I interested in starting?
- What services or products will I sell? Where will I be located?
- What skills and experience do I bring to the business?
- What will be my legal structure?
- What will I name my business?
- What equipment or supplies will I need?
- What insurance coverage will be needed?
- What financing will I need?
- What are my resources?
- How will I compensate myself?
Congratulations. You have birthed your idea in the form of a very basic business plan. There are three primary parts to a business plan.
The first is the business concept, where you discuss the industry, your business structure, your product or service and how you plan to make your business a success. The second is the marketplace, in which you describe and analyze potential customers: who and where they are, what makes them buy and so on. You’ll also describe your competition and how you’ll position yourself to beat it.
Finally, the financial section contains your income and cash flow statement, balance sheet and other financial ratios, such as break-even analysis. It seems like a lot of work, but when approached from the above list of questions, you can keep it simple and grow along the way.
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